Quyết định 07/2008/QD-NHNN

DECISION

ON THE ISSUANCE OF THE REGULATION ON THE DOMESTIC ISSUANCE OF VALUABLE PAPERS BY CREDIT INSTITUTIONS

THE GOVERNOR OF THE STATE BANK

- Pursuant to the Law on the State Bank of Vietnam issued in 1997 and the Law on the amendment, supplement of several articles of the Law on the State Bank of Vietnam issued in 2003;
- Pursuant to the Law on Credit Institutions issued in 1997, the Law on the amendment, and supplement of several articles of the Law on Credit Institutions issued in 2004;
- Pursuant to the Law on Enterprises issued in 2005;
- Pursuant to the Law on Securities issued in 2006;
- Pursuant to the Ordinance on Foreign Exchange issued in 2005;
- Pursuant to the Decree No. 52/2003/ND-CP dated 19/5/2003 of the Government providing for the functions, assignments, authorities and organizational structure of the State Bank of Vietnam;
- Pursuant to the Decree No. 52/2006/ND-CP dated 19/5/2006 of the Government on the issuance of corporate bonds;
- Upon the proposal of the Director of Monetary Policy Department,

DECIDES:

Article 1. To issue in conjunction with this Decision "the Regulation on the domestic issuance of valuable papers by credit institutions”.

Article 2. This Decision shall be effective after 15 days since its publication in the Official Gazette and replace the Decision No. 02/2005/QD-NHNN dated 04/01/2005 of the Governor of the State Bank on the issuance of the Regulation on the issuance of valuable papers by credit institutions for domestic funds mobilization.

Article 3. The Heads of units of the State Bank; General Managers of the State Bank branches in provinces, cities under the Central Government’s management; Chairperson of the Board of Directors, General Directors (Directors) of Credit Institutions and valuable paper buyers shall be responsible for the implementation of this Decision.

REGULATION

ON THE DOMESTIC ISSUANCE OF VALUABLE PAPERS BY CREDIT INSTITUTIONS
(Issued in conjunction with the Decision No. 07/2008/QD-NHNN dated 24 March 2008 of the Governor of the State Bank)

Chapter I

GENERAL PROVISIONS

Article 1. Governing scope

1. This Regulation provides for the issuance of valuable papers by credit institutions to mobilize funds from domestic and foreign organizations and individuals within the territory of Vietnam.

2. The public issuance of valuable papers, listing and transaction of valuable papers by credit institutions on securities market shall be performed in accordance with provisions of this Regulation, provisions of applicable laws on securities and securities market and related legal documents.

3. Valuable papers in gold, VND of which the value is secured upon gold price shall be performed in accordance with applicable provisions of the State Bank of Vietnam on mobilization and use of capital in gold, VND of which the value is secured upon gold price.

Article 2. Subjects issuing valuable papers

1. Credit institutions which are set up, operating in accordance with the Law on Credit institutions; the Law on the amendment, supplement of several articles of the Law on Credit Institutions and satisfy the conditions stipulated in this Regulation, include:

- State – owned credit institutions.

- Joint stock credit institutions.

- Central People Credit Fund.

- Joint – venture credit institutions.

- 100% foreign – owned credit institutions and branches of foreign bank authorized to operate in Vietnam.

2. For finance companies and finance leasing companies, types of valuable papers and term of valuable papers authorized to mobilize shall be performed in accordance with applicable provisions on organization and operation of finance companies, finance leasing companies.

Article 3. Purchasers of valuable papers

1. Purchasers of valuable papers shall include:

- Vietnamese organizations, individuals; Vietnamese people permanently residing overseas.

- Foreign organizations, foreign individuals engaging in investment activity in accordance with provisions of applicable laws of Vietnam, including foreign organizations, which, foreign individuals, who operate in Vietnam and do not operate in Vietnam.

2. Purchasers of valuable papers who are foreign organizations, foreign individuals, credit institutions shall only be entitled to issue non – bearer valuable papers.

Article 4. Interpretation

In this Regulation, following terms shall be construed as follows:

1. “Valuable paper” shall be the certificate issued by a credit institution to mobilize funds, which confirms the obligation to repay a certain amount of money within a specific time, conditions for interest payment and other commitments made by and between credit the institution and the purchaser.

2. “Short-term valuable paper” means the valuable paper with the term of less than 1 year, including promissory notes, short-term deposit certificates, bills and other short-term valuable papers.

3. “Long-term valuable paper” means the valuable paper with the term of one year upwards, including bonds, long-term deposit certificates and other long-term valuable papers.

4. “Non-bearer valuable paper” means the valuable paper to be issued in form of certificates or book entry with the name of the owner.

5. “Bearer valuable paper” means the valuable paper to be issued in form of certificates without the owner's name. The bearer valuable paper shall belong to the ownership of its holder.

6. “Face value” shall be the principal pre-printed or written on the valuable paper which is issued in certificate form or written on the certificate of ownership in respect of the valuable paper to be issued in book entry form.

7. “Total face value” shall be total of face values of valuable papers issued by the credit institution within a year or in an issue.

8. “Term of valuable paper” shall be the duration from the date of issue to the maturity date.

9. “Duration of issue” shall be the time period from the date when the credit institution starts the issue to the end of the last day of the issue.

10. “Fixed interest rate” shall be the interest rate that is unchangeable and applied during the term of the valuable paper.

11. “Periodically adjusted interest rate” shall be the interest rate to be changed on periodical basis according to the market, which is agreed upon by and between the credit institution and the purchaser upon issuing.

12. “Prepayment of interest” shall be the sale of value papers at the price lower than their face value and the purchaser shall be paid an amount equivalent to the face value of valuable papers upon their maturity.

13. “Payment in full of interest at maturity” shall be the payment in full of interest at maturity together with the principal amount (face value).

14. “Periodical payment of interest” shall be the payment of interest according to the coupon on 6 month or 1 year basis in respect of long-term valuable papers.

15. “Convertible bond” means the bond convertible into common share issued by the same credit institution in accordance with the conditions defined in the issuance plan.

16. “Proportion of converting bond into share” shall be the number of common shares that the bondholder is entitled to receive upon converting a bond into a share.

17. “Term of bond conversion” shall be the duration from date when the issuer starts the conversion of bonds to time the bond conversion ends..

18. “Warrant” means the securities issued in conjunction with the bond which defines the purchase right of certain volume of common shares by the bondholder in line with the defined conditions.

19. “Direct issuance of valuable papers” shall be the act that a credit institutions issue, by themselves, valuable papers to the purchasers of valuable papers.

20. “Issuing agent” shall be the act that an issuing agent performs the sale of valuable papers to purchasers of valuable papers under the authorization of issuing credit institution.

21. “Underwriting” is the act that an underwriter undertakes with the issuing credit institution to perform procedures before issuing valuable papers, to purchase a part of or entire of valuable papers of the credit institution for resale or to purchase the remaining volume of valuable papers of the issuing credit institution that have not been completely distributed yet or to give support to the issuing credit institution in distribution of valuable papers.

22. “Auction of valuable papers” is the selection of organizations, which, individuals who fully satisfy requirements of the issuing credit institution for participating in bidding.

23. “Auction by volume” is the auction appraisal on the basis of bidding volume of purchasers of valuable papers in line with the interest rate informed in advance by the issuing credit institution.

24. “Auction by interest rate” is the auction appraisal on the basis of bidding interest rate of purchasers of valuable papers.

25. “Pubic offer of bonds” is the offering of bonds by one of the following modes:

a) Through the mass media, including Internet.

b) Offering bonds to one hundred investors upwards, excluding professional investors being commercial banks, finance companies, finance leasing companies, insurance trading organizations, securities trading organizations.

c) Offering to indefinite number of investors.

Article 5. Proportion of holding valuable papers by foreign organizations, individuals

The proportion of holding valuable papers by foreign organizations, which, foreign individuals, who do not operate in Vietnam in the primary issuance shall be in line with applicable provisions of the State Bank and related legal documents from time to time.

Article 6. Public offer of bonds

1. Credit institutions shall offer bonds to the public in accordance with provisions of applicable laws on securities and securities market and related legal documents.

2. Credit institutions shall register the public offer of bonds in accordance with the guidance of the Ministry of Finance and the State Bank.

Article 7. Forms of issuance

1. Credit Institutions shall issue valuable papers in form of a non-bearer certificate, bearer certificate and book entry.

2. In case where the valuable papers are issued in form of book entry, the issuing credit institution shall grant a certificate of ownership of valuable paper to the purchaser.

Article 8. Elements of valuable paper

1. Valuable paper issued in form of a certificate must contain following elements:

- Name of the issuing credit institution.

- Name of the valuable paper (promissory note, bill, short-term deposit certificate, long-term deposit certificate, bond, etc.)

- Face value

- Term.

- Date of issue

- Maturity date

- Interest rate; modes of interest payment; time and place of interest payment.

- Place of repayment of the principal of valuable paper.

- Clearly stating whether the valuable paper is non-bearer or bearer one.

In case of non-bearer valuable paper, clearly stating: Name of the institution, number of establishment license or business registration certificate, address of the organization buying valuable papers (if the purchaser is an organization); Name, number of people’s identity card or passport, address of the valuable paper purchaser (if the purchaser is an individual).

- For the issuance of convertible bonds, clearly stating: Term of bond conversion, proportion of bond conversion.

- For the issuance of bond in conjunction with the warrant, clearly stating: Conditions for purchase of common shares by the warrant owner, number of shares to be purchased of each warrant, other rights and responsibilities of the warrant holder.

- Signature of General Director or authorized person and other signatures stipulated by the credit institution.

- Symbol, serial number of issue.

- Conditions, clauses on the transfer, discount, and mortgage of valuable papers at the issuing credit institution; dealing with risks, cases not authorized to make payment.

2. Apart from the elements as provided for in Paragraph 1 of this Article, issuing credit institutions may further provide for notes and other instructions relating to the valuable paper.

3. In respect of the valuable paper issued in form of book entry, the elements provided for in Paragraph 1 of this Article must be stated in the certificate of ownership of valuable paper.

4. In respect of valuable paper of which interest is paid on periodical basis, the interest coupon attached to the valuable paper must contain the elements relating to the valuable paper (serial number, face value), interest rate, the amount entitled to receive, the period of interest receipt.

5. Valuable paper issued in form of certificate must be designed and printed to ensure the high ability of anti-counterfeit.

Article 9. The currency of issue and payment

1. Valuable paper shall be issued in VND or foreign currency.

2. The issue, payment and transfer of valuable paper in foreign currency must comply with applicable provisions on foreign exchange control of the Socialist Republic of Vietnam.

Article 10. Duration of issue

Duration of an issue shall not exceed 60 days including weekends, holidays in accordance with provisions of applicable laws. Credit institutions shall only be entitled to issue beyond the above-mentioned duration upon obtaining the approval of the State Bank’s Governor.

Article 11. Interest rate

Interest rate of valuable paper shall be stipulated by the issuing credit institution in line with the market interest rate to ensure the business efficiency and operational prudence for the credit institution.

Article 12. Procedures of issuance and payment of valuable papers

Procedures of issuance and payment of the valuable papers shall be stipulated by the credit institution in line with the management features and model of the credit institution to ensure the security and accuracy of the issue and payment of valuable papers.

Article 13. Payment of principals and interests

1. Credit institutions shall make payment of the principal to the purchaser of valuable papers when they become due.

2. Credit institutions shall pay interests under the mode of pre-payment or payment in full at the due date or periodical payment.

3. Credit institutions shall agree on the payment of interests under the fixed or periodically adjusted interest rate.

4. The payment of valuable papers before their maturity shall be subject to the discretion of the credit institution itself in line with the provisions on risks management and ensuring the operational prudence of the credit institution.

5. Finance companies, finance leasing companies shall only be entitled to make payment  of the principal prior to the maturity for the valuable paper of which minimum actual term is equivalent to the shortest term authorized to mobilize.

Article 14. Transfer of valuable paper ownership, dealing with disputes and other risks

1. The ownership of valuable papers shall be transferred in such modes as purchase, sale, donation, gift, exchange and inheritance in accordance with the provisions of applicable laws.

2. Procedures of the transfer of valuable paper ownership, dealing with risks (wrinkled up, torn off, lost and other risks) shall be stipulated by the credit institution in compliance with the provisions of applicable laws, its business characteristics and conditions and ensuring the legal rights of valuable paper owners.

3. The settlement of disputes relating to valuable papers shall be performed in accordance with the provisions of the current laws of the Socialist Republic of Vietnam.

Article 15. Mortgage, discount and rediscount of valuable papers

1. Valuable papers can be used as mortgage at credit institutions according to provisions of applicable laws on loan security if accepted by those credit institutions.

2. Valuable papers can be discounted, rediscounted in accordance with the current provisions of the law on the discount and rediscount of valuable papers.

Article 16. Preservation, delivery and transport of valuable papers

Preservation, delivery and transport of valuable papers of credit institutions shall be performed in accordance with the current provisions of the Government and the State Bank.

Chapter II

Issuance of short-term valuable paper

Article 17. Face value of short - term valuable paper

The face value of short-term valuable paper shall be pre-printed or agreed upon by and between the issuing credit institution and the purchasers.

Article 18. Conditions of the issuance of short - term valuable papers

Credit institutions shall only be permitted to issue short-term valuable papers when they have fully complied with the limits of operational prudence according to the provisions of the Law on Credit Institutions, the Law on amendment, supplement of several articles of the Law on Credit Institutions and the guidance of the State Bank.

Article 19. Organization of issuance of short-term valuable papers

1. Credit institution shall take the initiative of organizing issues of short - term valuable paper in the year.

2. Credit institutions shall, at least 3 working days prior to the time of each issue, give an issuance notice of the expected issue to the State Bank (the Monetary Policy Department).

3. The issuance notice shall include following contents:

- Name of the issuing credit institution.

- Name of valuable paper

- Total face value of the issue.

- Mode of issuance.

- Form of issuance.

- Place of issuance.

- Term of valuable paper.

- Term of issuance.

- Interest rate; mode of interest payment; time, place of interest payment.

- Place of repayment of the principal of valuable paper.

- Other contents of the notice made by the issuing credit institution.

Chapter III

Issuance of long-term valuable papers

Article 20. Face value of long-term valuable paper

1. The face value of long-term valuable paper, which is denominated in VND and issued in form of certificate shall be at least one hundred thousand Vietnamese Dong. Face values that are greater than the minimum face value shall be the multiples of the minimum face value.

2. The face value of long-term valuable paper, which is denominated in foreign currency and issued in form of certificate shall be at least USD 100 or equivalent amount in other foreign currencies. Face values that are greater than the minimum face value shall be multiples of the minimum face value.

3. The face value of long-term valuable papers, which are bonds issued in form of certificate shall be pre-printed on the valuable papers.

4. The face value of long-term valuable papers, which are long-term deposit certificates issued in form of certificate shall be pre-printed or agreed upon by and between the issuing credit institution and the purchasers.

5. The face value of long-term valuable papers issued in form of book entry shall be agreed upon by and between the issuing credit institution and the purchasers.

Article 21. Issue date and maturity date of long-term valuable papers, which are bonds

Bonds that are issued in the same issue and have the same term shall have the same issue date and maturity date.

Article 22. Conditions for the issuance of long-term valuable papers

A credit institution shall be entitled to issue long-term valuable papers upon full satisfaction of following conditions:

1. To comply with limits of operational prudence in accordance with the provisions of the Law on Credit Institutions, the Law on amendment, supplement of several Articles of the Law on Credit Institutions and guidance of the State Bank.

2. It has been operating for at least one year since the day it officially came into operation.

3. Its total profits before taxes against the owner’s capital of the year preceding the issuing year must be 10% upwards and it must gain profit as at the latest time.

4. It must obtain the approval from the Governor of the State Bank for the issuance of long-term valuable papers in its fiscal year.

Article 23. Application file for the issuance of long-term valuable papers

Application file for the issuance of long-term valuable papers in the fiscal year includes:

1. The application for the issuance of long-term valuable papers in the fiscal year.

2. The issuance plan of long-term valuable papers in the fiscal year, which clearly states the issuing purpose, the plan of use of capital received from the issuance of long-term valuable papers; Total issuing face value, face value, name of the valuable paper, currency of issuance, place of issuance, mode of issuance, form of issuance, term, interest rate, mode of interest payment, place of payment of principals and interests, purchasers of valuable papers, number and expected time of each issue; Conditions and terms on rights and obligations of the credit institution and the purchaser. The issuance plan of long-term valuable papers must be approved by the Board of Directors.

3. The issuance plan of bonds for the supplement of own capital of the state-owned credit institution must be approved by the Ministry of Finance.

4. Audited financial statements of the two latest consecutive years as of the time of the application for the issuance. Credit institutions, which have been operating for less than two years, shall send the financial statements prepared from the time they commences operation to the time of the application for issuance. The contents of the financial statements shall be in accordance with current provisions of the Governor of the State Bank on reporting regime applicable to credit institutions. In case of submitting the application file for issuance in the first quarter, the credit institution may submit unauditted financial statements of the previous year and must submit the audited financial statements right after the completion of auditing.

5. Commitment of underwriting (if any).

6.  Business plan, plan of capital source and capital use of the financial year.

7. Charter and operation license (in respect of credit institutions, which carry out the first issuance).

8. Changes in organizational structure and other changes (if any).

Article 24. Forms and time limit for considering and deciding the issuance of long term valuable papers

1. The Governor of the State Bank shall make decision on the issuance of long-term valuable papers of the fiscal year by credit institutions.

2. Time limit for considering and deciding the issuance of long term valuable papers of the fiscal year by credit institutions shall not be in excess of 15 working days since the full receipt of the application file for the issuance of the credit institution.

Article 25. Organization of the issuance of long term valuable papers

1. Credit institutions shall take the initiative of organizing the issues of long- term valuable papers within the scope of the approved issuance plan of the financial year.

2. In the event where the issuance plan of long-term valuable papers of the credit institution for the fiscal year has been approved, but it does not organize the issuance, it must make a report to the State Bank (Department of Monetary Policy).

3. At least three working days before the time of issuance, the credit institution must give a Notice of issuance of long term valuable papers of the expected issue to the State Bank (Department of Monetary Policy).

4. Notice of issuance of long term valuable papers includes following contents:

- Name of the issuing credit institution

- Name of the valuable paper (bond, long term deposit certificate…)

- Total face value of the issue

- Mode of issuance

- Form of issuance

- Place of issuance

- Term of the valuable paper

- Term of issuance

- Interest rate; Mode of interest payment; Time, place of interest payment.

- Place of the repayment of the valuable papers’ principal

- Other contents to be informed of the issuing credit institution.

5. The credit institution shall only be permitted to issue in excess of the approved plan upon obtaining the written approval by the Governor of the State Bank. Application file for the supplement to the plan on the issuance of long term valuable papers of the fiscal year includes: An application for the additional issuance of long term valuable papers, an adjusted plan on the issuance of long term valuable papers, an adjusted business plan of the fiscal year.

Chapter IV

ISSUANCE OF CONVERTIBLE BONDS, WARRANT-LINKED BONDS

Article 26. Subjects of issuing convertible bonds, warrant-linked bonds

Convertible bond, warrant-linked bond shall be issued by joint stock credit institutions.

Article 27. Limits to the purchaser of convertible bond, warrant-linked bond

1. Purchaser of convertible bond or purchaser of warrant-linked bond being foreign organizations, individuals, upon the deadline of converting into shares or the deadline of buying shares, must comply with the current provisions of the Government and of the State Bank on the shares purchase of Vietnamese credit institutions by foreign investors and related legal documents.

2. Purchaser of convertible bond, or purchaser of warrant-linked bond being credit institutions, upon the deadline of converting into shares or the deadline of buying shares, must comply with the current provisions of the Law on Credit Institutions and of the State Bank on the limits of capital contribution, shares purchase and related legal documents.

Article 28. Conditions for the issuance of convertible bond, warrant-linked bond

A credit institution shall be entitled to issue convertible bonds, warrant-linked bonds upon the full satisfaction of following conditions:

1. Satisfying the conditions as provided for in Paragraph 1, Paragraph 2 Article 22 of this Regulation.

2. The project on the increase of charter capital from the source of issuing convertible bonds, warrant-linked bonds of the fiscal year which is adopted by the Shareholders’ General Meeting and approved by the Governor of the State Bank.

3. To be ranked A in the year preceding the issuing year by the State Bank of Vietnam. In the event where it has not been classified by the State Bank of Vietnam, it must be proposed to be ranked A by the State Bank branch in the province, city under the central Government’s management.

4. The average rate of after tax profit over owner’s capital of last 3 consecutive years must be higher than the interest rate expected to pay for the convertible bond, warrant-linked bond. For the credit institution which has been operating for 2 to under 3 years, the average rate of after tax profit over owner’s capital of last 2 consecutive years must be higher than the interest rate expected to pay for the convertible bond, warrant-linked bond. For the credit institution which has been operating for less than 2 years, the average rate of after tax profit over owner’s capital of the previous year must be higher than the interest rate expected to pay for the convertible bond, warrant-linked bond.

5. To be approved by the Governor of the State Bank for the issuance of convertible bond, warrant-linked bond of the fiscal year of credit institution.

Article 29. Application file for the issuance of convertible bond, warrant-linked bond

In addition to the provisions in Paragraphs 4, 5, 6, 7, 8, Article 23 of this Regulation, the application file for the issuance of convertible bond, warrant-linked bond of the fiscal year shall include:

1. An application for the issuance of convertible bond, warrant-linked bond of the fiscal  year.

2. The project on the increase of charter capital from the source of issuing convertible bond, warrant-linked bond of the fiscal year which is adopted by the Shareholders’ General Meeting and approved by the Governor of the State Bank.

3. A project on the issuance of convertible bond, warrant-linked bond of the fiscal year which states clearly:

- Purpose of issuance, plan on the use of capital received from the issue of convertible bond, warrant-linked bond; Total face value of the issue, face value, place of issuance, mode of issuance, form of issuance, term, interest rate; mode of interest payment; time, place of principal and interest payment; purchaser of bond, expected quantity and time of each issue; Terms and conditions concerning the rights and obligations of the credit institution and the purchaser. The issuance plan of convertible bond, warrant-linked bond must be approved by the Board of Directors.

- For the issuance plan of convertible bond, following contents must be clearly stated: Conditions, period of converting the bond; Conversion rate of the bond, method of calculating the conversion price; fluctuation amplitude of share price at the time of issuance and conversion of bond (if any).

- For the issuance plan of warrant-linked bond, following contents must be clearly stated: Conditions for buying common shares of the warrant holder, number of shares permitted to buy of each warrant, other rights and responsibilities of the warrant holder.

Article 30. Form and period of considering and deciding the issuance of convertible bond, warrant-linked bond

1. The Governor of the State Bank shall make a decision on the issuance of convertible bond, warrant-linked bond of the fiscal year of the credit institution.

2. Period of considering and making decision on the issuance of convertible bond, warrant-linked bond of the credit institution shall not exceed 20 working days since the full receipt of the application file from the credit institution.

Article 31. Underwriting of the convertible bond, warrant-linked bond

The purchase of convertible bond, warrant-linked bond of the underwriter must comply with provisions in Article 27 of this Regulation and related legal documents.

Article 32. Organization of the issuance of convertible bond, warrant-linked bond

1. Credit institutions shall take the initiative of organizing the issuance of convertible bond, warrant-linked bond within the scope of the approved issuing plan of the financial year.

2. In the event where the plan on the issuance of convertible bond, warrant-linked bond of the credit institution for the fiscal year has been approved, but it does not organize the issuance, it must make a report to the State Bank (Department of Monetary Policy).

3. At least three working days before the time of issuance, the credit institution must give a Notice of issuance of convertible bond, warrant-linked bond of the expected issue to the State Bank (Department of Monetary Policy).

4. Notice of issuance of convertible bond, warrant-linked bond includes following contents:

- Name of the issuing credit institution

- Name of the bond

- Total face value of the issue

- Mode of issuance

- Form of issuance

- Place of issuance

- Term of the bond

- Duration of issuance

- Interest rate; Mode of interest payment; Time, place of interest payment.

- Place of the repayment of the bond’s principal

- For the issuance of convertible bond, following contents must be clearly stated: Conditions, period of conversion; conversion rate of the bond, method of calculating the conversion price; fluctuation amplitude of share price at the time of issuance and conversion of bond (if any).

- For the issuance of warrant-linked bond, following contents must be clearly stated: Conditions for buying common shares of the warrant holder, number of shares permitted to buy of each warrant, other rights and responsibilities of the warrant holder.

- Other contents to be informed of the issuing credit institution.

Article 33. Acquisition of convertible bond, warrant-linked bond

The credit institution shall be authorized to acquire the convertible bond, warrant-linked bond upon the agreement with the bond purchaser and in line with applicable legal documents.

Chapter V

MODE OF ISSUANCE OF VALUABLE PAPERS

Article 34. Mode of issuance of valuable papers

Credit institutions may issue valuable papers under following modes:

1. Direct issuance of valuable papers

2. Underwriting

3. Issuing agent

4. Valuable papers bidding

Article 35. Direct issuance of valuable papers

The credit institution shall directly organize the issuance of valuable papers in correspondence with its features, conditions.

Article 36. Underwriter, issuing agent of valuable papers

1. Underwriters of valuable papers, issuing agents of valuable papers include credit institutions, securities companies authorized to engage in securities underwriting and other financial institutions as provided for in the operation license.

2. Commercial banks underwriting the public offer of bonds must be approved by the State Securities Commission in accordance with the conditions provided for by the Ministry of Finance.

Article 37. Mode of underwriting the valuable papers

1. The underwriting of valuable papers may be performed by one organization or co-performed by several organizations.

2. In case where several organizations jointly perform the underwriting of the valuable papers, it shall be performed under the mode of valuable papers co-underwriting.

3. The underwriter shall comply with the underwriting commitment with the credit institution.

4. The underwriting fee shall be agreed upon by and between the issuing credit institution and the underwriter of valuable papers.

Article 38. Mode of issuing agent of valuable papers

1. The issuing credit institution of valuable papers may authorize one or several organizations to jointly function as the issuing agent of valuable papers.

2. The issuing agent shall sell valuable papers to the purchaser of valuable papers in compliance with the commitment with the issuing credit institution. In case of not selling out, the issuing agent is permitted to return the left valuable papers to the issuing credit institution.

3. Fee of issuing agent of valuable papers shall be agreed upon by and between the issuing credit institution and the issuing agent of valuable papers.

Article 39. Mode of bidding valuable papers

1. The issuing credit institution of valuable papers shall be entitled to select following modes of bidding:

a. Direct bidding at the issuing credit institution of valuable papers.

b. Bidding through intermediary financial organizations.

c. Bidding through the Securities Trading Center, Securities Exchange.

2. The credit institution shall decide, at its own discretion, the form of bidding the valuable papers and build a specific process of bidding in respective with the features, business conditions of the very unit and related legal documents.

3. The organization of bidding must ensure the principle of confidential information of organizations, individuals participating in the bidding and ensure the equality between organizations, individuals participating in the bidding.

4. Fee of bidding valuable papers shall be agreed upon by and between the issuing credit institution and the organization authorized to organize the bidding of valuable papers.

Chapter VI

RESPONSIBILITIES OF CREDIT INSTITUTIONS, UNITS OF THE STATE BANK OF VIETNAM AND STATE BANK BRANCHES IN PROVINCES, CITIES UNDER THE CENTRAL GOVERNMENT’S MANAGEMENT

Article 40. Responsibilities of credit institutions

1. To submit the application file for the issuance of long-term valuable papers of the fiscal year; Application file for the issuance of convertible bond, warrant-linked bond; Notice of issuance of valuable papers by each issue to the State Bank (Department of Monetary Policy).

2. In case of public offer of bonds, the credit institution must submit a registration file to the State Securities Commission in accordance with the current provisions of laws on securities and securities market.

3. To publicly disclose the information about the issuance of valuable papers at the time of issue in line with the contents provided for in Paragraph 3 Article 19, Paragraph 4 Article 25 and Paragraph 4 Article 32 of this Regulation.

4. To take responsibility for the accuracy, truthfulness of the disclosed information.

5. To organize the issuance of valuable papers.

6. To make full and timely payment of the principals, interests to the purchasers of valuable papers.

7. Credit institution shall, after 10 working days at the latest since the completion of the issue, submit a written report on the result of the issuance of valuable papers in accordance with the formed stipulated in the Appendixe attached herewith to the State Bank (the Department of Monetary Policy) and the State Bank branch in province, city under the central Government’s management where its head office is located.

Article 41. Responsibilities of the State Bank branches in provinces, cities under the Central Government’s management

To provide specific opinion about the classification and approval or disapproval to the application for issuance of convertible bond, warrant-linked bond of the credit institutions whose head office is located in the local area (if required).

Article 42. Responsibilities of units of the State Bank of Vietnam

1. Department of Monetary Policy

a. To receive application files for the issuance of long-term valuable papers of the fiscal year; Application file for the issuance of convertible bond, warrant-linked bond; Notice of issuance of valuable papers in each issue, a report on results of valuable papers issuance by credit institutions;

b. To preside, coordinate with related units to consider the application for the issuance of long term valuable papers of the fiscal year, application for the issuance of convertible bond, warrant-linked bond for the submission to the Governor of the State Bank for consideration and approval or disapproval to the application of the credit institutions.

c. To research the performance of valuable papers issuance by credit institutions in order to recommend to the Governor of the State Bank for amendment of, supplement to provisions on the issuance of valuable papers by credit institutions.

2. State Bank Inspectorate

a. To provide the Department of Monetary Policy with following information:

- Assessments of the State Bank Inspectorate to the operation and financial situation of the credit institutions through the on-site inspection, off-site supervision.

- Data about the total profits before taxes over the owner’s capital of the year preceding the issuing year as at the latest time (in case of dealing with the application for the issuance of long term valuable papers of the credit institution).

- Result of credit institution classification of the year preceding the issuing year and the rate of after tax profit over owner’s capital as provided for in Paragraph 3, Paragraph 4 Article 28 of this Regulation (in case of dealing with the application for the issuance of convertible bond, warrant-linked bond of the credit institution).

b. To coordinate with the Department of Monetary Policy to consider and provide specific opinion about the approval or disapproval to the application for the issuance of long-term valuable papers, application for the issuance of convertible bond, warrant-linked bond of the credit institution.

c. To inspect, supervise the issuance of valuable papers of the credit institution; To deal with violation acts within the scope of their competence and recommend to the Governor of the State Bank for dealing with violations of provisions in this Regulation.

3. Department of Banks and Non-banking credit institutions

a. To provide the Department of Monetary Policy with information of organizational, operational situation of the credit institutions;

b. To coordinate with the Department of Monetary Policy to consider and provide specific opinion about the approval or disapproval to the application for the issuance of long term valuable papers, application for the issuance of convertible bond, warrant-linked bond of the credit institutions.

4. Department of Foreign Exchange Control

To cooperate with the Department of Monetary Policy to consider and provide opinions on dealing with the application for the annual issuance of long term valuable papers in foreign currency by credit institutions.

5. Finance – Accounting Department

To provide guidance on the accounting of the short term and long- term valuable paper issuing operation, convertible bond, warrant-linked bond issuing operation by the credit institutions.

6. Issuing and Vault Department

To provide advice to the credit institutions on the design of sample and printing of valuable papers to ensure the high anti-counterfeit features upon the request of the credit institutions.

Article 43. Dealing with violations

Organizations, individuals that violate provisions in this Regulation shall, depending on the nature and seriousness of the violation, be subject to administrative punishment in monetary area and banking activity or be prosecuted for criminal liability.

APPENDIX

REPORT ON THE ISSUANCE OF VALUABLE PAPER
Issue… year….

1. Issuing credit institution:

2. Place of issue:

3. Mode of issue:

4. Form of issue:

5. Duration of issue:

6. Mode of interest repayment:

7. Total turnover of issue converted into VND:

8. Detailed information:

Unit: billion VND/million USD